Is a nonprofit senior center exempt from Kansas sales tax on its purchases and fundraising sales?

Plain-English summary

A senior center asked to be exempt from Kansas sales tax. The Department's answer is no.

The Department acknowledged that organizations like a senior center "perform a great deal of services for their communities with the funds that they raise" — but explained that "not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not." There is no statutory exemption for senior centers, and creating one "would require a change to Kansas statutes through legislative action." The Department even suggested the center contact its elected Kansas representative and senator if it wants the law changed.

What the center must do. Because it is not exempt, the senior center is obligated to collect the appropriate Kansas sales tax on all of its taxable receipts, including fundraising projects.

Bottom line: doing charitable community work as a nonprofit does not, by itself, confer a Kansas sales-tax exemption. Without a specific statutory exemption, a senior center must collect and remit sales tax on its taxable sales — including fundraisers.

What this means for you

Senior centers and community nonprofits

Being a nonprofit that serves the community is not enough to be exempt in Kansas. Unless the legislature has specifically exempted your type of organization, you are not exempt — and you must collect sales tax on your taxable sales.

Fundraising is taxable

The ruling is explicit that fundraising projects are among the taxable receipts on which the center must collect tax. Don't assume that "it's for a good cause" makes fundraiser sales exempt.

Changing the result takes legislation

If you believe your organization should be exempt, the path is legislative — contact your state representative and senator. The Department cannot grant an exemption the statutes don't provide.

Common questions

Q: Is a nonprofit senior center exempt from Kansas sales tax?
A: No. The Department stated that not every nonprofit is exempt and that senior centers are not; the center must collect tax on its taxable receipts.

Q: Do we have to charge tax on our fundraisers?
A: Yes. The ruling specifically says the organization must collect the appropriate Kansas sales tax on all taxable receipts, including fundraising projects.

Q: How could a senior center become exempt?
A: Only through a change to Kansas statutes. The Department suggested contacting your elected Kansas representative and senator.

Citations and references

• Kansas retailers' sales tax act — exempts only entities the legislature has specifically provided for; senior centers are not among them, so the Department found no exemption (the ruling cites no specific subsection).
• K.A.R. 92-19-59 — the regulation authorizing Kansas private letter rulings.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2002-014

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

January 28, 2002

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Dear Ms. TTTTTTTT:

We wish to acknowledge receipt of your letter dated January 7, 2002, regarding the application of Kansas Retailers’ Sales tax.

Many organizations, such as your senior center, perform a great deal of services for their communities with the funds that they raise. However, not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not.

An exemption for senior centers, such as yours would require a change to Kansas statutes through legislative action. Therefore, you may also wish to contact your elected Kansas representative and senator.

In closing, your organization would be obligated to collect the appropriate Kansas sales tax(es)on all their taxable receipts, including fund raising projects.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 02/12/2002 Date Modified: 02/21/2002

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